CIMAPRA19-P03-1 Exam - Topic 2 Question 55 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 55
Topic #: 2

COM is a well established company in the construction industry The company was founded by the Mac family 30 years ago and several family members still serve on the Board The company obtained a listing five years ago The Board has an appropriate balance between executive and non-executive members It also has audit remuneration and nomination committees The average age of board members is 68

COM is profitable but profit margins have been falling steadily and this year's revenues are lower than it was achieved last year The Board recognis thai it does not have a long term strategy in place and has been losing business to newer, more aggressive competitors

Which THREE of the following statements are correct?

AThe remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

BThe nomination committee should have had a succession plan in place for directors.

CThe nomination committee should be operating for the benefit of the directors.

DThe audit committee should have alerted the Board to the impact of falling profit margins

EThe non-executive directors should have challenged the lack of long term strategic planning

Show Suggested Answer

Suggested Answer: A, B, E

by Viola at Sep 18, 2024, 11:21 AM

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Titus

3 months ago

The non-executive directors should have been more proactive about strategy!

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Trinidad

3 months ago

Totally agree, share options could motivate the Board for long-term focus.

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Jacquelyne

3 months ago

Not sure if the audit committee really dropped the ball here.

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Annabelle

4 months ago

A succession plan is definitely needed for the directors.

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Zana

4 months ago

The average age of board members is 68, wow!

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Isidra

4 months ago

I feel like the non-executive directors should be more proactive in challenging the board, especially with the declining profits. That seems crucial.

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Casey

4 months ago

I’m a bit confused about the audit committee's responsibilities. Shouldn't they focus more on financial accuracy rather than strategic issues?

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Reid

4 months ago

I think the nomination committee definitely should have a succession plan. It seems like a basic governance requirement, right?

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Youlanda

5 months ago

I remember discussing the role of the remuneration committee in class, but I'm not sure if share options are the best way to encourage long-term thinking.

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Jodi

5 months ago

I'll focus on the specific responsibilities of the committees and how they relate to the company's challenges. That should help me select the correct statements.

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Ben

5 months ago

Hmm, the average age of the board members is quite high, so the succession planning aspect is an important consideration.

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Ocie

5 months ago

I think the key is identifying the issues the company is facing and then determining which committees should have addressed them. The options give some good clues.

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Murray

5 months ago

The question is asking about the responsibilities of the different board committees, so I'll need to carefully consider the role of each one.

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Malcolm

5 months ago

This question seems straightforward, but I want to make sure I understand the key points before selecting my answers.

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Avery

1 year ago

The board members must be napping if their average age is 68. Time for some fresh blood!

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Veronique

1 year ago

B) The nomination committee should have had a succession plan in place for directors.

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Arlyne

1 year ago

The board needs younger members with fresh ideas.

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Clare

1 year ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Brice

1 year ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Kimbery

1 year ago

The non-executive directors should have challenged the lack of long-term strategic planning. That's their job, isn't it? They need to earn their keep.

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Reiko

1 year ago

D) The audit committee should have alerted the Board to the impact of falling profit margins

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Janna

1 year ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Horace

1 year ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Joanne

1 year ago

I'm not so sure about the nomination committee operating for the benefit of the directors. Shouldn't they be looking out for the company's best interests?

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Eulah

1 year ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Christa

1 year ago

B) The nomination committee should have had a succession plan in place for directors.

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Yvonne

1 year ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Aron

1 year ago

The audit committee should have definitely alerted the board to the impact of falling profit margins. That's a crucial oversight.

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Melina

1 year ago

I believe option E is correct as well. Non-executive directors should have challenged the lack of long term strategic planning.

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Nathan

1 year ago

I agree with Lenny. Option D is also correct because the audit committee should have alerted the Board about falling profit margins.

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Geraldo

1 year ago

Absolutely, the nomination committee should have had a succession plan in place for the directors. This oversight is concerning.

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Bettina

1 year ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Verda

1 year ago

B) The nomination committee should have had a succession plan in place for directors.

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Ben

1 year ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Cristal

1 year ago

The remuneration committee should definitely consider incentives like share options to encourage the board to focus on the company's long-term strategy. That's a no-brainer.

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Jesus

1 year ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Arlie

1 year ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Lenny

1 year ago

I think option A is correct because it's important to incentivize the Board to focus on long term strategy.

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